Document Type

Article

Publication Date

2-4-2026

Comments

This article is the author's final published version in International Journal of Financial Studies, Volume 14, Issue 12, February 2026, Article number 37.

The published version is available at https://doi.org/10.3390/ijfs14020037. Copyright © 2026 by the authors.

Abstract

This study examines the extent to which Indian technology equities generate sufficient returns relative to their inherent volatility and assesses whether intra-sector diversification can improve outcomes in this dynamic, high-risk sector. Drawing on data from January 2020 to April 2025, ten leading firms are analyzed using an integrated approach that incorporates traditional risk-adjusted indicators, downside-sensitive metrics, and a six-factor model featuring momentum. The results show clear heterogeneity in performance. Mid-cap innovators such as Persistent Systems and Coforge deliver positive and, in some cases, statistically significant alphas, while large-cap stocks including Infosys, Tata Consultancy Services (TCS), and Wipro provide stability but limited excess returns. At the portfolio level, an equally weighted allocation improves downside protection. However, factor-model analysis finds no statistically significant portfolio alpha once systematic exposures are accounted for. These findings highlight the importance of active firm-level selection within the Indian technology sector, while also underscoring the role of intra-sector diversification in mitigating extreme losses.

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Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.

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Language

English

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